For decades, family-owned Pico-Robertson-based health care industry staffing firm Coast Medical Services Inc. saw its revenue ebb and flow with the overall economy and shifting finances of its customers, primarily hospitals.

When current President Kenny Kadar took over running the firm from his mother in 2011, he began implementing a number of initiatives, with the aim of setting the company on a steady growth path.

None proved more fortuitous in terms of timing then a decision at the beginning of 2020 to set up a division devoted to staffing travel health care workers. These workers travel from one health care facility to another, filling in critical gaps in nursing or other positions that facilities have not been able to fill through in-house full-time hires.

Just four months later, the Covid-19 pandemic hit; the resulting crush of emergency room visits strained hospital staffs across the country to – and often past – their limits. Suddenly, travel health care workers – chiefly travel nurses – became the hottest commodity of any worker sector in the nation. They were able to command pay rates twice or even three times the pre-pandemic pay scales for unionized health care workers.

“With our travel health care worker division that officially launched in January 2020, Coast Medical was in prime position to fill that need,” Kadar said. “We moved to a 100% remote work environment, increased our capabilities and increased our scale to meet this demand.”

Demand for travel health care workers continued to escalate through 2021 and 2022, largely driven by high burnout rates among the internal nursing staffs of hospitals and other health care facilities.

As a result, Coast Medical’s revenue rose 559% from $8.5 million in 2020 to $56 million in 2022, placing the company at No. 3 on the Business Journal’s Fastest Growing Private Companies list.

One of the biggest challenges in handling this growth surge, Kadar said, was finding and securing enough travel health care workers.

“We were operating in the same labor shortage market that everyone else was operating in,” he said. “We were able to find the workers, but it was a challenge.”

Staffing up internally to meet the higher recruitment and placement volumes of travel health care workers was another challenge. The ability to work remotely was a plus in recruiting this additional internal staff.

Kadar added that looking back, some of these growing pains could have been minimized if he and the company had invested in technology-based process improvements earlier. That would have allowed Coast Medical to standardize work flow, increase transparency and provide more reliable performance metrics.

Slowing down

This year, however, the market has shifted somewhat. The Covid pandemic has ebbed and emergency room visits have generally been trending down, albeit with occasional spikes.

As a result, hospitals that either went into the red or went deeper into the red during the Covid emergency are now looking to stabilize their finances. And the first place hospital executives are looking to is cutting their reliance on higher-cost travel health care workers.

Kadar acknowledged this, saying that the health care staffing industry has slowed significantly.

“What the industry experienced in recent years was not sustainable,” he said. “Both demand and rate have reset to a more sustainable level; the health care staffing industry is expected to decline by approximately 20% year over year as a result.”

To combat this, Kadar said Coast Medical will have to be “more creative” in working with its health care facility customers, doing a better job of managing costs while still delivering quality care for patients.

But Kadar sees this as more of a short-term reset.

“Long term, the demand for quality clinicians will increase,” he said.

“An aging population will drive increased demand for health care services in a world where there is a limited supply of them. A chronic shortage of qualified workers will result, and a premium will be placed on recruiting and retaining clinicians,” he added.

Despite Coast Medical’s larger size and the increasing siren call of other locales that comes along with that size, Kadar said he has no intention of moving the company out of Los Angeles or the state.

“Coast Medical Service has our roots in California.,” Kadar said. “I live in Los Angeles and California remains our corporate home.”